EXHIBIT 10.48
MANAGEMENT EMPLOYMENT AGREEMENT
The following agreement (hereinafter known as "Agreement") is hereby entered
into between Xxxxxxx XxXxxxxx (hereinafter known as "Employee") and
eResearchTechnology, Inc. (together with its affiliated corporations hereinafter
known as the "Company") and having its principal offices at 00 X. 00xx Xxxxxx,
Xxxxxxxxxxxx, XX 00000 on June 12, 2006 and shall be effective as of June 23,
2006.
1. DUTIES AND RESPONSIBILITIES
Employee agrees to hold the position of President and Chief Executive
Officer and shall be directly responsible to the Board of Directors. Employee
shall be based in Arlington, Virginia but understands that he shall be obligated
to travel to the Company's offices in Philadelphia and elsewhere and to such
other locations as may be reasonably necessary to perform his duties as
President and Chief Executive Officer.
2. BEST EFFORTS
Employee agrees to devote his best efforts to his employment with the
Company, on a full-time (no less than 40 hours/week) basis. He further agrees
not to use the facilities, personnel or property of the Company for private
business benefit.
3. ETHICAL CONDUCT
Employee will conduct himself in a professional and ethical manner at all
times and will comply with all company policies as well as all State and Federal
regulations and laws as they may apply to the services, products, and business
of the Company.
4. TERM OF THE AGREEMENT
This Agreement will be effective upon full execution and will continue year
to year unless terminated.
5. COMPENSATION
a. Salary shall be $350,000/year payable in equal installments as per the
company's payroll policy. Salary shall be considered on an annual
basis and adjusted based on performance.
b. Benefits shall be the standard benefits of the Company, as they shall
exist from time to time and will include a $1000 per month car
allowance.
c. This position qualifies for the Executive Bonus Plan of the Company.
For 2006, the Employee's bonus target will be 50% of his base salary
if the company meets its Board approved objectives for the year. Bonus
will be prorated based on Employee's starting date with the Company,
and may be increased or decreased based on performance as per the 2006
bonus plan. The Employee will also be
eligible to participate in the Executive Bonus Plan each year
thereafter for the life of the Agreement at a level to be determined
by the Compensation Committee of the Company's Board of Directors.
d. Employee will be granted 150,000 stock options on the date employment
begins, priced at the closing price of the stock on that date subject
to approval of the Company's Board of Directors. These options are
granted pursuant to the Company's 2003 Stock Option Plan and will have
a term of seven years and vest in four equal consecutive annual
installments commencing one year from the date of grant; provided,
however, that upon any Change of Control (as hereinafter defined),
one-third of such options shall, to the extent not previously vested,
become vested.
e. As a sign-on bonus, Company agrees to pay Employee $150,000 on or
prior to November 1, 2006.
6. NON-DISCLOSURE
Employee acknowledges that employment with the Company requires him to have
access to confidential information and material belonging to the Company,
including customer lists, contracts, proposals, operating procedures, trade
secrets and business methods and systems, which have been developed at
great expense by the Company and which Employee recognizes to be unique
assets of the Company's business. Upon termination of employment for any
reason, Employee agrees to return to the Company any such confidential
information and material in his possession with no copies thereof retained.
Employee further agrees, whether during employment with the Company or any
time after the termination thereof (regardless of the reason for such
termination), he will not disclose nor use in any manner, any confidential
or proprietary material relating to the business, operations, or prospects
of the Company except as authorized in writing by the Company or required
during the performance of his duties.
7. BUSINESS INTERFERENCE; NONCOMPETITION
a. During employment with the Company and for a period of one year (the
"Restrictive Period") thereafter (regardless of the reason for
termination) Employee agrees he will not, directly or indirectly, in
any way for his own account, as employee, stockholder, partner, or
otherwise, or for the account of any other person, corporation, or
entity; (i) request or cause any of the Company's suppliers, customers
or vendors to cancel or terminate any existing or continuing business
relationship with the Company; (ii) solicit, entice, persuade, induce,
request or otherwise cause any employee, officer or agent of the
Company to refrain from rendering such services to the Company or to
terminate his relationship, contractual or otherwise, with the
Company; or (iii) induce or attempt to influence any customer or
vendor to cease or refrain from doing business or to decline to do
business with the Company or any of its affiliated distributors or
vendors.
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b. The Employee agrees that, during the Restrictive Period, the Employee
will not directly or indirectly, accept employment with, provide
services to or consult with, or establish or acquire any interest in,
any business, firm, person, partnership, corporation or other entity
which engages in any business or activity that is competitive with the
business conducted by the Company in any state of the United States of
America and in any foreign country in which any customer to whom the
Company is providing services or technology is located; provided,
however, that the foregoing shall not prohibit ownership of less than
1% of the outstanding shares of any class of capital stock registered
under the Securities Exchange Act of 1934, as amended.
8. FORFEITURE FOR BREACH; INJUNCTIVE RELIEF
a. Any breach of the covenants made in Sections 6 and 7 hereof shall
result in the forfeiture of the Employee's right to any and all
payments which may be required to be made under this Agreement
following such breach and shall relieve the Company of any obligation
to make such payments.
b. The Employee acknowledges that his compliance with the covenants in
Sections 6 and 7 hereof is necessary to protect the good will and
other proprietary interests of the Company and that, in the event of
any violation by the Employee of the provisions of Section 6 or 7
hereof, the Company will sustain serious, irreparable and substantial
harm to its business, the extent of which will be difficult to
determine and impossible to remedy by an action at law for money
damages. Accordingly, the Employee agrees that, in the event of such
violation or threatened violation by the Employee, the Company shall
be entitled to an injunction before trial from any court of competent
jurisdiction as a matter of course and upon the posting of not more
than a nominal bond in addition to all such other legal and equitable
remedies as may be available to the Company.
c. The rights and remedies of the Company as provided in this Section 8
shall be cumulative and concurrent and may be pursued separately,
successively or together against Employee, at the sole discretion of
the Company, and may be exercised as often as occasion therefore shall
arise. The failure to exercise any right or remedy shall in no event
be construed as a waiver or release thereof.
d. Employee agrees to reimburse the Company for any expenses incurred by
it in enforcing the provisions of Sections 6 and 7 hereof if the
Company prevails in that enforcement, and the Company agrees to
reimburse Employee for any expenses incurred by him in defending any
such enforcement actions if he prevails in such actions.
9. INVENTIONS
Employee agrees to promptly disclose to the Company each discovery,
improvement, or invention conceived, made, or reduced to practice (whether
during working hours or otherwise) during the term of employment. Employee
agrees to grant to the Company the entire interest in all of such
discoveries, improvements, and inventions and to sign all
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patent/copyright applications or other documents needed to implement the
provisions of this paragraph without additional consideration. Employee
further agrees that all works of authorship subject to statutory copyright
protection developed jointly or solely, while employed, shall be considered
a work made for hire and any copyright thereon shall belong to the Company.
Any invention, discovery or improvement conceived, made or disclosed during
the one year period following the termination of employment with the
Company shall be deemed to have been made, conceived or discovered during
employment with the Company.
Employee acknowledges any discoveries, improvements and other inventions
made prior to the date of initial employment with the Company or the date
hereof, which have not been field in the United States Patent Office, are
attached on Exhibit A, which shall be executed by both the Employee and the
Company.
10. NO CURRENT CONFLICT
a. The Company is aware of and has reviewed Employee's Key Employee
Agreement with his former employer, PAREXEL International Corporation
("PXL"), which contains non-disclosure and non-competition provisions.
In hiring Employee, the Company agrees to assume the risk that PXL may
bring legal claims (regardless of their merit) against Employee and/or
the Company alleging violation of these provisions. The Company agrees
to indemnify and hold harmless Employee from any and all claims,
actions and judgments, including reasonable costs and attorneys' fees
incurred in defending against same, arising from and related to any
allegation by PXL that the Employee has breached the provisions of his
Key Employment Agreement with PXL.
b. The Company also agrees that, should Employee be enjoined from working
for the Company as a result of claims brought by PXL in the future,
such an event shall not be considered grounds to terminate Employee
for Cause, and the Company shall continue to provide Employee with his
full salary and other compensation and benefits until the injunctive
period ends; provided, however, that if the injunction period extends
for more than 90 days, the Company shall have the right to terminate
Employee's employment hereunder immediately by notice to Employee. Any
such termination shall be considered a termination of this Agreement
other than for Cause.
11. TERM; TERMINATION AND TERMINATION BENEFITS
a. Employment is "at will" which means that either the Company or
Employee may terminate at any time, with or without cause of good
reason, upon written notice at least 30 days prior to termination.
b. This Agreement shall terminate upon the death of the Employee. In
addition, if, as a result of mental or physical condition which, in
the reasonable opinion of a medical doctor selected by the Company's
Board of Directors, can be expected to be permanent or to be of an
indefinite duration and which renders the Employee unable to carry out
the job responsibilities held by, or the tasks assigned to, the
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Employee immediately prior to the time the disabling condition was
incurred, or which entitles the Employee to receive disability
payments under any long-term disability insurance policy which covers
the Employee for which the premiums are reimbursed by the Company (a
"Disability"), and the Employee shall have been absent from his duties
hereunder on a full-time basis for 120 consecutive days, or 180 days
during any twelve month period, and within thirty (30) days after
written notice (which may occur before or after the end of such 120 or
180 day period) by the Company to Employee of the Company's intent to
terminate the Employee's employment by reason of such Disability, the
Employee shall not have returned to the performance of his duties
hereunder, the Employee's employment hereunder shall, without further
notice, terminate at the end of said thirty-day notice.
c. (1) The Company may also terminate the Employee's employment under
this Agreement for Cause. For purposes of this Agreement, the
Company may terminate you for "cause" by majority vote of the
Board of Directors if the Employee, in the reasonable judgment of
such majority, (i) fails to perform any reasonable directive of
the Company that may be given from time to time for the conduct
of the Company's business; (ii) materially breaches any of his
commitments, duties or obligations under this Agreement; (iii)
embezzles or converts to his own use any funds of the Company or
any business opportunity of the Company; (iv) destroys or
converts to his own use any property of the Company, without the
Company's consent; (v) is convicted of, or indicted for, or
enters a guilty plea or plea of no contest with respect to, a
felony; (vi) is adjudicated an incompetent or (vii) violates any
federal, state, local or other law applicable to the business of
the Company or engages in any conduct which, in the reasonable
judgment of the Company, is injurious to the business or
interests of the Company. The Company must give the Employee
written notice of the Employee's breach under sections
11.c.(1).(i.), 11.c.(1).(ii), and 11.c.(1).(vii) and an
opportunity to cure within thirty (30) days of such written
notice. If the Employee fails to cure, the Company may terminate
the Employee for Cause and shall give notice of termination to
the Employee as required under Section 11.a.
(2) Notwithstanding the foregoing, in the event of a Change of
Control (as hereinafter defined) within eight months after the
date of this Agreement, then the provisions of Section 11c.(1)
shall be superseded and replaced by the following:
The Company may also terminate the Employee's employment
under this Agreement for Cause. For purposes of this
Agreement, "Cause" shall mean any one or more of the
following: (i) the Employee's willful failure or refusal to
perform substantially his duties on behalf of the Company
for a period of thirty (30) days after receiving written
notice identifying in reasonable detail the nature of such
failure or refusal; (ii) the Employee's conviction of, entry
of a plea of guilty or nolo contendere to, or admission of
guilt
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in connection with a felony; (iii) disloyalty, willful
misconduct or breach of fiduciary duty by the Employee which
causes material harm to the Company; or (iv) the Employee's
willful violation of any confidentiality, developments or
non-competition agreement which causes material harm to the
Company. Notwithstanding the foregoing, the Employee shall
not be deemed to have been terminated for Cause unless and
until there shall have been delivered to him a copy of a
resolution duly adopted by the Company's Board of Directors
(the "Board") (excluding the Employee if he is a Director)
at a meeting of the Board called and held for (but not
necessarily exclusively for) that purpose (after reasonable
notice to the Employee and an opportunity for the Employee,
together with counsel of his choice, to be heard by the
Board) finding that the Employee has, in the good faith
opinion of the Board, engaged in conduct constituting Cause
and specifying the particulars thereof in reasonable detail.
d. Upon termination of this Agreement for Cause, the Company shall have
no further obligation to Employee other than for annual salary and
bonus earned through the date of termination, and no severance pay or
other benefits of any kind shall be payable; provided, however, that
in the event the Company terminates this Agreement other than for
Cause or as a result of the death or Disability of the Employee, the
Company shall provide to the Employee (i) severance equal to 100% of
his then-current annual salary and applicable bonus (calculated
assuming 100% achievement and pro rated based on the number of days
elapsed during the year prior to the date on which the termination of
employment occurred), payable in one lump sum and (ii) continuation of
Benefits (as hereafter defined), subject to applicable benefit plan
provisions, for one year.
e. Notwithstanding any contrary provision contained in this Agreement,
upon the first occurrence of a Trigger Event (as hereafter defined),
the Employee shall be entitled to receive (i) severance equal to 100%
(or, if such Trigger Event occurs within eight months after the date
hereof, 200%) of his then current annual salary and applicable bonus
(calculated assuming 100% achievement and pro rated based on the
number of days elapsed during the year prior to the date on which the
termination of employment occurred), payable in one lump sum (ii)
continuation of Benefits (as hereafter defined), subject to applicable
benefit plan provisions, for two years (or, if earlier, until such
time as Employee shall have obtained new employment with benefits
substantially comparable to the Benefits); and (iii) accelerated
vesting of all stock options, such that all stock options held by
Employee immediately prior to the date of Change of Control (as
hereafter defined) shall become exercisable in full as of the date of
the Change of Control.
The term "Benefits" as utilized in this Section 11, shall mean
standard health, dental, disability, life and accident insurance
benefits at least equivalent to the benefits in place prior to
termination, all of which are subject to any applicable premium
co-pay, and car allowance.
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The term "Trigger Event" as utilized in this Section 11 shall mean the
occurrence of a Change of Control (as hereafter defined) in connection
with or after which either (i) the Employee is terminated other than
for Cause; or (ii) the Employee resigns his employment within 60 days
after the Change of Control because neither the Company nor the other
party to the Change of Control (the "Buyer") offers the Employee a
position with comparable responsibilities, authority, location and
compensation, it being understood and agreed that (A) a position that
requires the employee to manage the cardiac safety business of the
Company or the Buyer, whether conducted as a separate company or a
division of the Company or the Buyer, as President of such company or
division, and to have responsibilities in connection with the
integration of any acquisition that constitutes a Change of Control
and for corporate development thereafter shall be deemed a position
with comparable responsibilities and authority, and (B) a position
that permits Employee to be based within 50 miles of Arlington,
Virginia but requires travel to locations within the Northeastern
United States to perform the duties of such position shall be deemed a
position with a comparable location.
The term "Change of Control", as utilized herein, shall mean:
(i) A change in control of a nature that would be required to be reported
in the Company's proxy statement under the Securities Exchange Act of
1934, as amended;
(ii) The approval by the Board of Directors of a sale, transfer or
disposition of all or substantially all of the Company's assets and
business to an unrelated third party and the consummation of such
transaction; or
(iii) The approval by the Board of Directors of any merger, consolidation,
or like business combination or reorganization of the Company, the
consummation of which would result in the occurrence of any event
described in clause (i) or (ii) above, and the consummation of such
transaction.
In order to implement the provisions of this Section 11.e., in
connection with any Change of Control, the Company shall, as a
condition thereto, accelerate the vesting of all unvested stock
options as of the date of the Change of Control or cause the Buyer to
either assume all stock options held by the Employee immediately prior
to the Change of Control or grant equivalent substitute options
containing substantially the same terms, and the Company shall not
otherwise take any action that would cause any stock options held by
the Employee that are not then exercisable to terminate prior to the
Change of Control or Trigger Event, as otherwise permitted by the
Company's 2003 Stock Option Plan or as may be permitted by the Buyer's
stock option plan, respectively.
12. MISCELLANEOUS
a. This Agreement and any disputes arising herefrom shall be governed by
Pennsylvania law. In the event of any dispute arising out of or
relating to this Agreement or the breach hereof, the parties shall use
their reasonable commercial
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efforts to settle the dispute by direct negotiations between
individuals with full settlement authority. If the dispute is not
settled through negotiation within 30 days after the dispute is first
asserted, the parties shall submit the dispute to arbitration, which
shall decide any unresolved controversy or claim arising out of or
relating to this Agreement by binding arbitration in accordance with
National Rules for the Resolution of Employment Disputes of the
American Arbitration Association. The arbitration shall take place in
Philadelphia, Pennsylvania and shall be conducted by a single
arbitrator agreed upon by the parties who is an attorney with at least
fifteen years of experience in dealing with executive employment
matters; provided, however, that if the parties have not agreed upon
an arbitrator within 30 days after expiration of the negotiation
period, then the arbitration shall be conducted by three arbitrators,
each of whom shall meet the foregoing criteria, one of whom shall be
selected by the Company, one of whom shall be selected by the Employee
and the third of whom shall be selected by agreement of the first two.
Notwithstanding the foregoing provisions of this Section 12.a, the
Company shall be entitled to seek equitable relief as contemplated by
Section 8.b hereof from a court of competent jurisdiction and either
party shall have the right to initiate an action in a court of
competent jurisdiction to enforce any arbitration decision.
b. In the event that any provision of this Agreement is held to be
invalid or unenforceable for any reason, including without limitation
the geographic or business scope or duration thereof, this Agreement
shall be construed as if such provision had been more narrowly drawn
so as not to be invalid or unenforceable.
c. This Agreement supersedes all prior agreements, arrangements, and
understandings, written or oral, relating to the subject matter.
d. The failure of either party at any time or times to require
performance of any provision hereof shall in no way effect the right
at a later time to enforce the same. No waiver by either party or any
condition or of the breach by the other of any term or covenant
contained in this Agreement shall be effective unless in writing and
signed by the aggrieved party. A waiver by a party hereto in any one
or more instances shall not be deemed or construed as a further or
continuing waiver of any such condition or breach or a waiver of any
other condition, or of the breach of any other term or covenant set
forth in Agreement.
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e. Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given when
delivered in person, sent by certified mail, postage prepaid, or
delivered by a nationally recognized overnight delivery service
addressed, if to the Company at 00 X. 00xx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxxxxx, XX 00000 Attn: Chairman and if to the Employee, at the
address of his personal residence as maintained in the Company's
records.
For Employee: For the Company:
/s/ Xxxxxxx XxXxxxxx /s/ Xxxx Xxxxxxxxxx, MD
-------------------- -----------------------
Name: Xxxx Xxxxxxxxxx, MD
Chairman
Date: June 12, 2006 Date: June 12, 2006
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